Budget 2016: Spectrum estimates a shade too optimistic

The non-debt capital receipts are budgeted at Rs 67,134 crore, including Rs 56,500 crore on account of disinvestment receipts

With limited buoyancy in tax receipts at a time when the economy remains sluggish, the finance minister is betting big on non-tax receipts — spectrum payments and disinvestments — having pegged these at Rs 3.22 lakh crore in FY17.

However, spectrum receipts are likely to fall way short of the targeted Rs 99,000 crore. That’s because the auctions for 700 MHz aren’t likely to be successful, given that the reserve price is very high at Rs 11,485 crore per MHz.

Companies such as Bharti and Vodafone have said they are unlikely to bid for it. If these auctions don’t go off well, the receipts could be somewhere in the region of Rs 71,000 crore by auctioning spectrum in the 2100 MHz and 2300MHz bands.

Telcos typically pay around 30% of the amount upfront — which would amount to Rs 21,000 crore in FY17, since the auctions are scheduled sometime in May or June.

Add to that another Rs 10,000 crore, which is the next instalment of the deferred payment for the auction held in 2014 and another Rs 25,000 crore from annual licence fees and spectrum user charges, and it works out to approximately Rs 56,000 crore. That’s more or less the amount mopped up in FY16 of Rs 56,034 crore.

The non-debt capital receipts are budgeted at Rs 67,134 crore, including Rs 56,500 crore on account of disinvestment receipts.

The amount received as miscellaneous capital receipts in FY16 was Rs 25,312 crore. The disinvestment receipts include estimated receipt of Rs 36,000 crore from the sale of stakes in public sector enterprises as well as Rs 20,500 crore from the sale of strategic and minority stake holdings.

The government is also hoping to mop up higher interest receipts and dividends of Rs 1.24 lakh crore.